As banks tightened lending criteria after the 2008 recession, it is increasingly important to have a good credit rating to access credit for mortgages, credit cards, loans or even a mobile phone contract. Before applying for a loan or finance, it can be worthwhile checking the credit file data held by the major credit reference agencies like Call Credit, Experian or Equifax to understand whether an application is likely to be successful and if not, take steps to improve your credit rating before applying for credit.
If you have a bad or poor credit history, improving a credit rating is something that can be done. It can take some time but essentially it means borrowing money and repaying money and any interest owed when it is due and meeting at least the minimum required payments in full, taking care to ensure your total indebtedness remains manageable. Establishing a record of meeting all your financial obligations, and as good practice paying all your household bills, parking fines and Council Tax on time, should help improve your credit score.
Vanquis Bank has already accepted credit applications from over 2.5 million people in the UK. An application for a Vanquis Card may be a positive step towards better credit if you manage your account properly. Vanquis is a UK Bank that is willing to provide credit to people who may have bad, poor or no credit history.
Why and how to Improve Credit?
A poor credit rating can limit borrowing options available to you. A poor or bad credit history can be the result of:
- County Court Judgments (CCJs), defaulted payments and bankruptcy orders
- Missed or late payments on credit card debts or other credit commitments
- Moving address too frequently or not being registered on the electoral roll
Often the first time someone realises that their credit file is not perfect is when they apply for credit and get turned down. The simple fact of having applied for credit leaves a footprint on the credit file. A number of applications over a short period of time can be viewed negatively by lenders.
Applying for a Vanquis Bank Visa and using the credit card responsibly may help improve your credit score↗, other tips include:
- Make sure all your debts are registered to your correct name and current address
- Ensure there are no mistakes on your credit file
- Register on the electoral roll (if eligible)
- Avoid making too many applications for credit in a short period
- Apply for credit only where you have a decent chance of being accepted. Read the eligibility criteria for the product carefully before applying. For example if the product says it will not accept those with County Court Judgments within the last 12 months, then avoid applying if you have a CCJ within the last 12 months.
- Establish a clear pattern of borrowing and paying back monies borrowed
- Manage your financial affairs carefully to ensure all payments can be met